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Q: “What is the purpose of a Private Placement Memorandum?”
This document, sometimes referred to as an offering memo, describes details related to the private offering of securities. Privately held businesses may use this to attract investors by outlining the offering terms, potential risks, and description of the company and its management, how proceeds will be used and what securities are being offered. These offerings need not be registered with the SEC or other federal agencies as they meet the requirements of a registration exemption outlined in the Securities Act of 1933.
For more information about how this type of offering works, and to understand when a business can consider a PPM, contact our Business, Corporate, and Venture attorneys.